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ELCPartially AllowedNot stated in the extract· [2019] KEELC 4241 (KLR)

I K M & 6 others v Kitongi Investments Limited & 2 others [2019] KEELC 4241 (KLR)

Environment and Land Court
8 March 2019
OAO. A. Angote
3,466 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenyan homeowners can stop construction on shared estate land if the landowner changes the property's use without approval from all sub-lessees.

What this practically means

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Executive summary

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The Plaintiffs, being a guardian of two minors who inherited eight housing units in South Park Estate and six sub-lessees of Maisonettes on L.R. No. 20521, sought a temporary injunction restraining the Defendants from constructing a school on Phase IV of the suit land pending the hearing of the suit. The dispute arose after the 1st Defendant's shareholders agreed on 11th September, 2018 to sub-divide the land, transfer the undeveloped Phase IV to the 2nd and 3rd Defendants, and change its user from residential to educational. The Defendants objected on jurisdictional grounds, contending that challenges to change of user lie under the Physical Planning Act and EMCA, and that the sub-leases required mediation or arbitration. The court held that the Plaintiffs' claim was founded on breach of the registered sub-leases and raised cross-cutting proprietary issues beyond the remit of the Liaison Committees or NEMA; Section 7(1) of the Arbitration Act also permits interim measures despite arbitration agreements. Applying the Giella v Cassman Brown principles, the court found that the sub-lessees, as beneficial owners through the Management Company, ought to approve any change to the nature of the title; the Defendants' failure to obtain such approval, despite having procured sub-division and user approvals earlier, established a prima facie case. Loss of the reversionary interest was held to be irreparable in monetary terms. The Plaintiffs' application was allowed and the Defendants' application to set aside the ex-parte orders dismissed, both with costs.

Key legal issues

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01

Jurisdiction vis-à-vis statutory and arbitral alternative remedies

Holding

The court has jurisdiction because the Plaintiffs' claim is for breach of sub-leases and declaratory/specific performance relief, not a challenge to administrative approvals

Reasoning

The Plaintiffs were not challenging the County Government or NEMA approvals; their claim concerned breach of sub-leases, sub-division and issuance of separate titles. These cross-cutting proprietary issues fall to be determined by the ELC, and Section 7(1) of the Arbitration Act permits interim measures despite arbitration clauses. The jurisdictional objection was dismissed.

p. 3
02

Prima facie case for injunction

Holding

A prima facie case with chances of success was established because the Defendants changed the nature of the title without the approval of all sub-lessees contrary to the sub-leases

Reasoning

The sub-leases registered against the mother title made the Plaintiffs and other sub-lessees beneficial owners with reversionary interest vesting in the Management Company. The Defendants procured sub-division approvals and agreed to change user without consulting all sub-lessees, contrary to the Agreements and the Plaintiffs' legitimate expectation.

p. 4
03

Irreparable injury

Holding

The Plaintiffs are likely to suffer irreparable injury not quantifiable in monetary terms if the sub-division and separate titles issue proceeds

Reasoning

If the Defendants sub-divide the land into Phases I-IV and separate titles issue, the Plaintiffs stand to lose the reversionary interests guaranteed in the sub-leases and Sale Agreements. Such loss of reversionary interest cannot be adequately compensated by an award of damages.

p. 5

Legal principles established

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  • Sub-lessees registered against a mother title are beneficial owners through the Management Company, and changes to the nature of the title or development ought to be approved by the sub-lessees
  • Where a claim is founded on breach of sub-leases and involves cross-cutting proprietary issues, the existence of alternative statutory remedies does not oust the court's jurisdiction
  • Under Section 7(1) of the Arbitration Act, interim measures of protection may be sought from the High Court notwithstanding an arbitration agreement

Court orders

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  1. 1.A temporary injunction granted against the Defendants from undertaking, continuing with, overseeing or managing any construction on Phase IV of property L.R. No. 20521 I.R No. 74204 pending the hearing and determination of the suit
  2. 2.The Plaintiffs' Application dated 5th October, 2018 allowed with costs
  3. 3.The Defendants' Application dated 24th October, 2018 dismissed with costs

Authorities

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Legislation

  • Physical Planning ActSection 33(3)
  • Physical Planning ActSections 10, 13, 15(1) and (4)
  • Environmental Management and Co-ordination Act (EMCA)Not specified
  • Arbitration ActSection 7(1)

Cases cited (2)

  • Speaker of the National Assembly vs. The Hon. James Njenga Karume
    Civil Application No. 92 of 1992
  • Giella vs. Cassman Brown & Co. Ltd
    (1973) E.A 358
Jurisdiction invoked
Article 162(2)(b) jurisdiction of the Environment and Land Court (implied); court held jurisdiction over contractual sub-lease disputes notwithstanding Physical Planning Act and Arbitration Act mechanisms

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "I K M & 6 others v Kitongi Investments Limited & 2 others [2019] KEELC 4241 (KLR)", Case Analysis (2019). Not stated in the extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4241/eng@2019-03-08

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.